The 2010 grant was given to the Dallas-based biotechnology company Peloton Therapeutics for "recruitment, relocation and formation." Peloton aims to discover and develop new cancer drugs. Its grant was one of the first four commercial grants awarded by the agency.

According to the cancer agency, an internal audit found that its chief commercialization officer at the time, Jerry Cobbs, improperly included the Peloton proposal on list of commercialization awards presented to its oversight committee. Although it had not been reviewed by a panel of commercial or scientific reviewers, the Peloton grant was approved.

Cobbs resigned this month for undisclosed reasons. He could not be reached for comment Thursday.

"CPRIT must have the trust of our fellow Texans that we are not only doing great work, but that we are also doing everything the right way," Bill Gimson, executive director, said in a statement released late Thursday.

Review skipped

Although the statement seemed to blame Cobbs, the agency's website says it is the job of the executive director, Gimson, to submit the list of grant applications to the oversight committee for final approval. It says the commercialization review council may make recommendations to the executive director.

In a Peloton news release announcing the grant in July 2010, Cobbs was quoted as saying the award marked only the beginning of the relationship between the state agency and the company.

"CPRIT is delighted to contribute to its potential success in developing breakthrough cancer therapeutics and delivering significant value to cancer patients and their families," Cobbs said. "We anticipate a long and productive collaborative relationship."

The agency said Peloton has resubmitted its proposal, which will undergo a commercialization and scientific review.

Voters approved the creation of the cancer initiative in 2007 to disburse $3 billion in taxpayer-funded bonds over 10 years to state institutions and companies for cancer research and treatment. Its first grant was awarded in late 2009.

Mass resignation

This summer and fall the agency had to cope with the mass resignation of scientific reviewers, led by Nobel Laureate Al Gilman. The scientists cried foul over a $20 million grant for the commercialization of cancer drugs awarded to a team led by Dr. Lynda Chin, a University of Texas M.D. Anderson Cancer Center researcher who is the wife of the institution's president, Dr. Ronald DePinho.

The resigning scientists cited concerns that some members of the cancer initiative's politically appointed oversight committee, particularly Houston biotech investor Charles Tate, were using undue influence to ensure that certain commercial grants received funding without scientific review.

Tate remains a member of the agency's oversight committee.

In the wake of the M.D. Anderson grant controversy, the cancer agency vowed to reform the process by which it approves commercial grants. It also hired a compliance officer, Patricia Vojack, to add another layer of oversight.

Its actions are expected to be reviewed during the 2013 legislative session, and the state auditor's office is expected to issue recommendations regarding the agency in January.

Prior to these latest revelations Gov. Rick Perry expressed support for CPRIT, saying in October that its chairman, telecommunications executive James Mansour, has done "exceptional work."

Criticism voiced

Outside observers have been less charitable, however. The influential scientific journal Nature called upon Mansour to resign due to CPRIT's apparent "cronyism."

And an independent ethicist, Paul Wolpe of Emory University, said it's difficult to imagine how the agency can retain its credibility unless Mansour and other leaders step down. "What I see happening here is damage control rather than responsibility, and tone deafness rather than sensitivity," Wolpe said in October.